Indus to benefit from Vi’s equity boost and of quickly recovering dues

Telecom infrastructure giant Indus Towers is poised to recover its outstanding dues from Vodafone Idea following the latter’s successful equity market fundraising of Rs 18,000 crore. This development was shared by Indus Towers’ Managing Director and CEO, Prachur Sah, during the company’s earnings call. While Sah refrained from providing a specific timeline for the recovery of dues, he expressed optimism about a swift resolution.

Indus Towers, in its financial statements, disclosed doubtful receivables amounting to Rs 5,385.3 crore from Vodafone Idea as of March 31, 2024. This figure represents all overdue payments from the telecom operator, which has been grappling with financial challenges. The infusion of Rs 18,000 crore into Vodafone Idea through a Follow-on Public Offer (FPO) is anticipated to bolster the company’s operations and facilitate partial debt repayment.

Vikas Poddar, Chief Financial Officer of Indus Towers, indicated that discussions with Vodafone Idea regarding the clearance of dues are underway. These discussions are expected to positively impact Indus Towers’ cash flow in the fiscal year 2025. The telecom infrastructure provider reported a significant increase in its consolidated profit for the year ending March 31, 2024. Profits surged to Rs 6,036.2 crore, nearly tripling from Rs 2,040 crore in the previous fiscal year. Despite this remarkable growth in profits, the company’s annual revenue from operations remained relatively stable at Rs 28,600.6 crore compared to Rs 28,381.8 crore in FY23.

The financial performance of Indus Towers highlights its resilience and strategic management amidst the challenges faced by its major client, Vodafone Idea. The ability to navigate through these challenges and secure the recovery of outstanding dues will be crucial for sustaining its growth trajectory and maintaining a stable cash flow in the coming years. Good Returns